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In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $64,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $54,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 500,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places. Sales revenue Cost of goods sold Gross profit (loss) REED COMPANY Comparative Income Statements For the Years Ended December 31 2024 0 2023 0

In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $64,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $54,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 500,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places. Sales revenue Cost of goods sold Gross profit (loss) REED COMPANY Comparative Income Statements For the Years Ended December 31 2024 0 2023 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $ 5,100,000 $4,200,000 3,000,000 940,000 2,140,000 815, 000 500,000 164,000 228,000 104,000 Sales revenue Cost of goods sold Administrative expense On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $104,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 442,000 154,000 228,000 1/1/2024-9/30/2024 $ 540,000 (360,000) (64,000) (34,000) $ 82,000 2023 $ 640,000 (494,000) (54,000) (34,000) $ 148,000 Selling expense Operating income before taxes. In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above
Transcribed Image Text:Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $ 5,100,000 $4,200,000 3,000,000 940,000 2,140,000 815, 000 500,000 164,000 228,000 104,000 Sales revenue Cost of goods sold Administrative expense On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $104,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 442,000 154,000 228,000 1/1/2024-9/30/2024 $ 540,000 (360,000) (64,000) (34,000) $ 82,000 2023 $ 640,000 (494,000) (54,000) (34,000) $ 148,000 Selling expense Operating income before taxes. In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above
es In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $64,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $54,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 500,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places. Sales revenue. Cost of goods sold Gross profit (loss) REED COMPANY Comparative Income Statements For the Years Ended December 31 2024 www 0 2023
Transcribed Image Text:es In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $64,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $54,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 500,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places. Sales revenue. Cost of goods sold Gross profit (loss) REED COMPANY Comparative Income Statements For the Years Ended December 31 2024 www 0 2023
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